Indicate by check mark whether the registrant (1) filed all reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90
days. Yes x No ¨

Indicate by check mark whether the registrant has submitted electronically and has posted on its corporate website, if any, every
Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such
files). Yes ¨ No ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller
reporting company. See the definitions of large accelerated filer, accelerated filer and smaller reporting company in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer

¨

Accelerated filer

x

Non-accelerated filer

¨ (Do not check if a smaller reporting company)

Smaller reporting company

¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange
Act). Yes ¨ No x

As of May 4, 2010, there were 33,966,228 shares of the registrants no par value common stock outstanding.

The
information contained in this report is furnished by Radiant Systems, Inc. (Radiant, Company, we, us, or our). In the opinion of management, the information in this report contains all
adjustments, consisting only of normal recurring adjustments, which are necessary for a fair statement of the results for the interim periods presented. The financial information presented herein should be read in conjunction with the financial
statements included in the Companys Form 10-K for the year ended December 31, 2009, as filed with the Securities and Exchange Commission.

In the opinion of management, the unaudited interim condensed consolidated financial statements of Radiant Systems, Inc., included herein, have been
prepared on a basis consistent with the December 31, 2009 audited consolidated financial statements, and include all material adjustments, consisting of normal recurring adjustments, necessary to fairly present the information set forth
therein. These unaudited interim condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in Radiants Form 10-K for the year ended December 31,
2009. Radiants results of operations for the three months ended March 31, 2010 are not necessarily indicative of future operating results.

The preparation of financial statements in conformity with generally accepted accounting principles in the United States of America requires management
to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates.

The accompanying unaudited condensed consolidated financial statements of Radiant have been prepared in accordance with generally accepted accounting
principles applicable to interim financial statements, the general instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and notes required by generally accepted accounting principles for
complete financial statements.

Basic net income
per common share is computed by dividing net income by the weighted average number of shares outstanding. In the event of a net loss, dilutive loss per share is the same as basic loss per share. Diluted net income per share includes the dilutive
effect of stock options. A reconciliation of the weighted average number of common shares outstanding assuming dilution is as follows (in thousands):

Three Months EndedMarch
31,

2010

2009

Weighted average common shares outstanding

33,368

32,579

Dilutive effect of outstanding stock options

1,369



Weighted average common shares outstanding assuming dilution

34,737

32,579

For the three months ended March 31, 2010 and 2009, options to
purchase approximately 2.5 million and 6.4 million shares of common stock, respectively, were excluded from the above reconciliation, as the options were anti-dilutive for the periods then ended.

The Company
follows FASB ASC Topic 220, Comprehensive Income, (ASC 220). ASC 220 establishes the rules for the reporting of comprehensive income and its components. The Companys comprehensive income (loss) includes net income and
foreign currency translation adjustments. Total comprehensive income (loss) for the three months ended March 31, 2010 and 2009 was approximately $1.3 million and $(1.9) million, respectively.

Costs associated with obtaining long-term debt are deferred and amortized over the term of the related debt. The Company incurred financing costs in 2008
related to the credit agreement with JP Morgan Chase Bank, N.A. equal to approximately $1.2 million. The costs were deferred and are being amortized over five years. Amortization of financing costs was $0.1 million in each of the three-month periods
ended March 31, 2010 and 2009, respectively.

The Company follows the guidance of FASB ASC section 825-10-50 (ASC 825-10-50) for disclosures about fair value of its financial instruments.
The Company also follows the guidance of FASB ASC section 820-10-35 (ASC 820-10-35) to measure the fair value of its financial instruments. ASC 820-10-35 establishes a framework for measuring fair value in accounting principles generally
accepted in the United States of America (U.S. GAAP) and expands disclosures about fair value measurements. To increase consistency and comparability in fair value measurements and related disclosures, ASC 820-10-35 establishes a fair value
hierarchy which prioritizes the inputs to valuation techniques used to measure fair value into three broad levels. The fair value hierarchy gives the highest priority to quoted prices (unadjusted) in active markets for identical assets or
liabilities and the lowest priority to unobservable inputs. The three levels of fair value hierarchy defined by ASC 820-10-35 are described below:



Level 1  Quoted market prices available in active markets for identical assets or liabilities as of the reporting date.



Level 2  Pricing inputs other than quoted prices in active markets included in Level 1, which are either directly or indirectly observable as of
the reporting date.



Level 3  Pricing inputs that are generally observable inputs and not corroborated by market data.

The following methods and assumptions were used to estimate the fair value of each class of financial instruments:

Long-term debt  Term loan  To estimate the fair value of our term loan, which is not quoted on an exchange, the Company used those interest
rates that were currently available to it for issuance of debt with similar terms and remaining maturities. At March 31, 2010, the fair value of the $18.5 million principal amount of the term loan under the JPM Credit Agreement was
approximately $18.1 million.



Long-term debt  Revolving credit loan  To estimate the fair value of our revolving credit facility, which is not quoted on an exchange, the
Company used those interest rates currently available to it in conjunction with managements estimate of the amounts and timing of the repayment of principal amounts and related interest. At March 31, 2010, the fair value of the $43.2
million principal amount of the revolving credit loan under the JPM Credit Agreement was approximately $41.4 million.

In
October 2009, the FASB issued Accounting Standards Update (ASU) No. 2009-14 (ASU 2009-14), Software (Topic 985): Certain Revenue Arrangements That Include Software Elementsa consensus of the FASB Emerging Issues
Task Force. This ASU establishes that tangible products that contain software that works together with the nonsoftware components of the tangible product to deliver the tangible products essential functionality are no longer within the
scope of software revenue guidance. These items should be accounted for under other appropriate revenue recognition guidance. We are required to adopt this ASU prospectively for new or materially modified agreements as of January 1, 2011 and
concurrently with ASU 2009-13 which is described below. Full retrospective application is optional and early adoption is permitted at the beginning of a fiscal year. We are currently evaluating the impact of this ASU on our financial statements.

In October 2009, the FASB issued Accounting Standards Update No. 2009-13 (ASU 2009-13), Revenue Recognition (Topic 605):
Multiple-Deliverable Revenue Arrangementsa consensus of the FASB Emerging Issues Task Force. This ASU amends the criteria for separating consideration in multiple-deliverable arrangements, which will, as a result, separate
multiple-deliverable arrangements more often than under existing U.S. GAAP. Additionally, this ASU establishes a selling price hierarchy for determining the selling price of a deliverable. The ASU also eliminates the residual method of revenue
allocation and requires that arrangement consideration be allocated at the inception of the arrangement to all deliverables using the relative selling price method. This guidance requires that management determine its best estimate of selling price
in a manner consistent with that used to determine the price to sell the deliverable on a stand-alone basis. This ASU significantly expands the disclosures required for multiple-deliverable revenue arrangements with the objective of disclosing
judgments related to these arrangements and the effect that the use of the relative selling-price method and changes in those judgments have on the timing and amount of revenue recognition. We are required to adopt this ASU prospectively for new or
materially modified agreements as of January 1, 2011 and concurrently with ASU 2009-14, which is described above. Full retrospective application is optional and early adoption is permitted at the beginning of a fiscal year. We are currently
evaluating the impact of this ASU on our financial statements.

The Company has adopted equity incentive plans that provide for the grant of incentive and non-qualified stock options and restricted stock awards to
directors, officers and other employees pursuant to authorization by the Board of Directors. The exercise price of all options equals the market value on the date of the grant. In addition, the Company provides employees stock purchase rights under
its Employee Stock Purchase Plan (ESPP). The ESPP permits employees to purchase Radiant common stock at the end of each quarter at 95% of the market price on the last day of the quarter. Based on these terms, the ESPP will not result in
any future stock compensation expense. The Company has authorized approximately 18.2 million shares for awards of stock options and restricted stock, of which approximately 0.3 million shares are available for future grants as of
March 31, 2010.

The Company accounts for equity-based compensation in accordance with FASB ASC Topic 718, CompensationStock
Compensation (ASC 718), which requires the Company to measure the cost of employee services received in exchange for all equity awards granted, including stock options and restricted stock awards, based on the fair market value of
the award as of the grant date. The estimated fair value of the Companys equity-based awards, less expected forfeitures, is amortized over the awards vesting period on a straight-line basis. The non-cash stock-based compensation expense
from stock options and restricted stock awards was included in the condensed consolidated statements of operations as follows (in thousands):

Three Months EndedMarch
31,

2010

2009

Cost of revenues - systems

$

34

$

42

Cost of revenues - maintenance, subscription and transaction services

18

24

Cost of revenues - professional services

25

95

Product development

80

69

Sales and marketing

167

264

General and administrative

783

1,016

Total non-cash stock-based compensation expense

1,107

1,510

Estimated income tax benefit

(418

)

(512

)

Total non-cash stock-based compensation expense, net of tax benefit

$

689

$

998

Impact on diluted net income per share

$

0.02

$

0.03

The Company capitalized less than $0.1 million in stock-based compensation cost related to product development in each of
the three-month periods ended March 31, 2010 and 2009.

The exercise price of each stock option equals the market price of Radiants common stock on the date of grant. Most options are scheduled to vest
equally over a three or four-year period or when certain stock performance requirements are met. These stock performance requirements include a provision that allows for early vesting if certain stock price targets are met. The Company recognizes
stock-based compensation expense using the graded vesting attribution method. Outstanding options expire no later than ten years from the grant date. The fair value of each option grant is estimated on the date of grant using the
Black-Scholes-Merton option pricing model. The weighted average assumptions used in the model for the three-month periods ended March 31, 2010 and 2009 are outlined in the following table:

Three Months EndedMarch 31,

2010

2009

Expected volatility

69%

69%

Expected life (in years)

3-4

3-4

Expected dividend yield

0.00%

0.00%

Risk-free interest rate

1.97%

1.57%

The computation of the expected
volatility assumption used in the Black-Scholes-Merton calculations for new grants is based on a combination of historical and implied volatilities. When establishing the expected life assumption, the Company reviews annual historical employee
exercise behavior of option grants with similar vesting periods. The risk-free interest rate is based on the U.S. Treasury yield curve at the grant date, using a remaining term equal to the expected life of the option. The total expense to be
recorded in future periods will depend on several variables, including the number of stock-based awards that vest, pre-vesting cancellations and the fair value of those vested awards.

A summary of the changes in stock options outstanding under our stock-based compensation plans during the three months ended March 31, 2010 is
presented below:

(in thousands, except per share data)

Number ofShares

Weighted-AverageExercise
Price

Weighted-AverageRemainingContractual Term
(in years)

AggregateIntrinsicValue

Outstanding at December 31, 2009

5,875

$

9.37

3.30

$

14,656

Granted

530

$

13.45

Exercised

(355

)

$

5.76

Forfeited or cancelled

(8

)

$

11.91

Outstanding at March 31, 2010

6,042

$

9.93

3.39

$

27,342

Vested or expected to vest at March 31, 2010

5,954

$

9.93

3.35

$

26,990

Exercisable at March 31, 2010

4,697

$

9.90

2.81

$

21,609

Exercisable at December 31, 2009

4,455

$

9.51

2.98

$

10,278

The weighted average
grant-date fair value of options granted during the three-month periods ended March 31, 2010 and 2009 was $7.20 and $1.63, respectively. The total intrinsic value, the difference between the exercise price and the market price on the date of
exercise, of options exercised during the three-month period ended March 31, 2010 was $2.3 million. No options were exercised during the three-month period ended March 31, 2009. The total fair value of options that vested during the
three-month periods ended March 31, 2010 and 2009 was approximately $2.6 million and $2.1 million, respectively. There were unvested options outstanding to purchase approximately 1.3 million and 2.0 million shares as of March 31,
2010 and 2009, respectively, with a weighted-average grant-date fair value of $4.89 and $3.59, respectively. None of the 1.3 million options that were unvested at March 31, 2010 had a vesting period based on stock performance requirements,
and of the 2.0 million shares that were unvested at March 31, 2009, there were 0.3 million options that had a vesting period based on stock performance requirements. The unvested shares have a total unrecognized compensation expense
as of March 31, 2010 and 2009 equal to approximately $4.6 million and $3.1 million, respectively, net of estimated forfeitures, which will be recognized over the weighted average periods of 1.5 years and 1.3 years, respectively. The Company
recognized stock-based compensation expense related to employee and director stock options equal to approximately $0.5 million and $1.1 million for the three months ended March 31, 2010 and 2009, respectively. Cash received from stock options
exercised was approximately $2.0 million during the three-month period ending March 31, 2010. No options were exercised during the three-month period ending March 31, 2009.

The Company awarded approximately 0.2 million shares and 0.4 million shares of restricted stock to employees under the Amended and Restated 2005
Long-Term Incentive Plan during the three months ended March 31, 2010 and 2009, respectively. These restricted stock awards vest at various dates over a three-year period from the date of grant. The weighted average grant-date fair value of
restricted stock awards at March 31, 2010 and 2009 was $13.47 and $3.25 per share, respectively. The Company recognized stock-based compensation expense related to restricted stock awards equal to approximately $0.6 million and $0.4 million for
the three months ended March 31, 2010 and 2009, respectively. The total fair value of restricted stock awards that vested during the three-month periods ended March 31, 2010 and 2009 was approximately $0.3 million and $0.2 million,
respectively. There were unvested restricted stock awards outstanding at March 31, 2010 and 2009 equal to approximately 0.9 million shares and 0.7 million shares, respectively, with a weighted-average grant-date fair value of $8.55
and $6.66, respectively. The unvested restricted stock awards had a total unrecognized compensation expense as of March 31, 2010 and 2009 equal to approximately $4.7 million and $3.4 million, respectively, which will be recognized over the
weighted average periods of 1.9 and 2.4 years, respectively. The unvested restricted stock awards outstanding are included in the calculation of common shares outstanding as of March 31, 2010.

In
accordance with FASB ASC Topic 350, IntangiblesGoodwill and Other (ASC 350), we classify purchased intangibles into three categories: (1) goodwill; (2) finite-lived intangible assets subject to amortization; and
(3) indefinite-lived intangible assets. Goodwill and indefinite-lived intangible assets are not amortized. As required by ASC 350, these assets are reviewed for impairment on at least an annual basis.

Goodwill is recognized when
the consideration paid for a business acquisition exceeds the fair value of the net assets acquired, including tangible and intangible assets. Changes in the carrying amount of goodwill for the three months ended March 31, 2010 are as follows
(in thousands):

Intangible assets recorded in connection with business acquisitions are stated at their fair value, determined as of the date of acquisition, less
accumulated amortization, if applicable. These assets consist of finite-lived and indefinite-lived intangibles, including core and developed technology, customer relationships, noncompete agreements and trademarks and tradenames. Amortization of
finite-lived intangible assets is recognized on a straight-line basis over their estimated useful lives. A summary of the Companys intangible assets as of March 31, 2010 and December 31, 2009 is as follows (in thousands):

WeightedAverageAmortizationLives

March 31, 2010

December 31, 2009

GrossCarryingValue

AccumulatedAmortization

GrossCarryingValue

AccumulatedAmortization

Hospitality-Americas

Core and developed technology

3.2 years

$

12,500

$

(12,500

)

$

12,500

$

(12,500

)

Reseller network

15.0 years

9,200

(3,808

)

9,200

(3,654

)

Direct sales channel

10.0 years

3,600

(2,235

)

3,600

(2,145

)

Covenants not to compete

3.3 years

1,600

(1,579

)

1,600

(1,569

)

Trademarks and tradenames

Indefinite

1,300



1,300



Trademarks and tradenames

5.0 years

300

(269

)

300

(254

)

Customer list and contracts

4.2 years

7,195

(3,575

)

7,195

(3,147

)

Total Hospitality-Americas

35,695

(23,966

)

35,695

(23,269

)

Retail & Entertainment-Americas

Core and developed technology

4.5 years

8,018

(5,743

)

7,952

(5,540

)

Reseller network

10.1 years

9,545

(4,293

)

9,437

(4,004

)

Subscription sales

4.0 years

1,400

(1,400

)

1,400

(1,400

)

Covenants not to compete

10.0 years

150

(89

)

150

(86

)

Trademarks and tradenames

Indefinite

1,235



1,200



Trademarks and tradenames

6.0 years

700

(496

)

700

(467

)

Customer list and contracts

9.7 years

4,738

(1,223

)

4,719

(1,109

)

Backlog

2 months

92

(92

)

92

(92

)

Total Retail & Entertainment-Americas

25,878

(13,336

)

25,650

(12,698

)

International

Core and developed technology

4.3 years

8,703

(2,173

)

9,148

(1,623

)

Reseller network

7.0 years

6,132

(1,591

)

6,428

(1,361

)

Trademarks and tradenames

Indefinite

1,615



1,720



Customer list and contracts

10.0 years

1,828

(396

)

1,910

(350

)

Total International

18,278

(4,160

)

19,206

(3,334

)

Other intangible assets

2,021

(900

)

2,021

(843

)

Total intangible assets

$

81,872

$

(42,362

)

$

82,572

$

(40,144

)

The table below summarizes the approximate amortization expense, assuming no future acquisitions, dispositions or
impairments of intangible assets, for the following 12-month periods subsequent to March 31, 2010 (in thousands):

A summary of the Companys accounts receivable as of March 31, 2010 and December 31, 2009 is as follows (in thousands):

March 31, 2010

December 31,2009

Trade receivables billed

$

51,539

$

43,220

Trade receivables unbilled

6,665

3,127

58,204

46,347

Less allowance for doubtful accounts

(3,885

)

(3,832

)

$

54,319

$

42,515

The Company maintains allowances for doubtful accounts for estimated losses that may result from the inability of customers
to make required payments. Estimates are developed by using standard quantitative measures based on customer payment practices and history, inquiries, credit reports from third parties and other financial information. If the financial condition of
the Companys customers were to deteriorate, resulting in impairment of their ability to make payments, additional allowances may be required. Bad debt expense totaled less than $0.1 million and approximately $0.3 million for the three-month
periods ended March 31, 2010 and 2009, respectively.

Inventory consists principally of computer hardware and related components, peripherals and software media and is stated at the lower of cost (first-in,
first-out method) or market. A summary of the Companys inventory as of March 31, 2010 and December 31, 2009 is as follows (in thousands):

Prior to January 2008, the Company had a senior secured credit facility with Wells Fargo Foothill, Inc. (the WFF Credit Agreement). The WFF
Credit Agreement provided for extensions of credit, upon satisfaction of certain conditions, in the form of revolving loans in an aggregate principal amount of up to $15 million and a term loan facility in an aggregate principal amount of up to $31
million. The revolving loan amount available to the Company was derived from a monthly borrowing base calculation using the Companys various accounts receivable balances. The amount derived from this borrowing base calculation was further
reduced by the total amount of letters of credit outstanding. Loans under the WFF Credit Agreement bore interest, at the Companys option, at either the London Interbank Offering Rate (LIBOR) plus two and one half percent or the
prime rate of Wells Fargo Bank, N.A.

The WFF Credit Agreement was scheduled to expire on March 31, 2010. However, it was refinanced on
January 2, 2008 upon the execution of the credit agreement with JPMorgan Chase Bank, N.A., as arranger, and JPMorgan Chase Bank, N.A., SunTrust Bank, Bank of America, BBVA Compass Bank and Wachovia Bank, N.A., as lenders (the JPM Credit
Agreement). The JPM Credit Agreement and subsequent amendments thereto provide for extensions of credit, upon satisfaction of certain conditions, in the form of revolving loans in an aggregate principal amount of up to $80 million and a term
loan facility in an aggregate principal amount of up to $30 million. The Company has the right to increase the revolving credit commitment by up to $25 million, subject to the terms and conditions set forth in the JPM Credit Agreement. As of
March 31, 2010, aggregate borrowings under this facility totaled $61.7 million, comprised of $43.2 million in revolving loans and $18.5 million in term loan facility borrowings. As of March 31, 2010, revolving loan borrowings available to
the Company were equal to $36.8 million.

The JPM Credit Agreement is guaranteed by the Company and its subsidiaries and is secured by the
assets of the Company and its subsidiaries. The maturity date of the JPM Credit Agreement is January 2, 2013. Interest accrues on amounts outstanding under the loan facility, at the Companys option, at either (1) LIBOR plus a margin
ranging between 1.25% and 2.00%, based upon the Companys consolidated leverage ratio, as defined, or (2) the higher of the administrative agents prime rate or one-half of one percent over the federal funds effective rate plus a
margin ranging between 0.25% and 1.00%, based on the Companys consolidated leverage ratio, as defined. The JPM Credit Agreement contains certain customary representations and warranties from the Company. It also contains customary covenants,
including: use of proceeds; limitations on liens; limitations on mergers, consolidations and sales of the Companys assets; and limitations on related party transactions. In addition, the JPM Credit Agreement requires the Company to comply with
various financial covenants, including maintaining leverage and fixed charge coverage ratios, as defined. The leverage ratio covenant limits the Companys consolidated indebtedness to a multiple of three times its consolidated earnings before
interest, taxes, depreciation and amortization (EBITDA) as determined on a pro forma basis over the prior four quarters. The fixed charge coverage ratio requires the Company to maintain the ratio of its consolidated EBITDA as determined
on a pro forma basis less capital expenses to its fixed charges (which includes regularly scheduled principal payments, consolidated interest expense, taxes paid or payable in accordance with GAAP, and restricted payments) to at least 1.2 to 1 for
periods ending in 2008, 1.3 to 1 for periods ending in 2009, and 1.35 to 1 thereafter. The JPM Credit Agreement also contains certain customary events of default, including defaults based on events of bankruptcy and insolvency, nonpayment of
principal, interest or fees when due (subject to specified grace periods), breach of specified covenants, change in control and material inaccuracy of representations and warranties. The Company was in compliance with its financial and non-financial
covenants as of March 31, 2010.

In the third quarter of 2008, the Company assumed research and development loans with the Austrian
government in the amount of $0.1 million in conjunction with the acquisition of Orderman, bearing interest at approximately 2.50%, which were repaid in the third quarter of 2009. In the fourth quarter of 2008, the Company entered into an additional
research and development loan with the Austrian government in the amount of $0.7 million, bearing interest at approximately 2.50%. As of March 31, 2010, $0.6 million had been drawn on this loan. This loan matures on March 31, 2013.

In the second quarter of 2005, the Company entered into an amended and restated promissory note in the amount of $1.5 million with the
previous shareholders of Aloha Technologies, Inc., acquired by the Company in January 2004. During the fourth quarter of 2005, the Company modified the amended promissory note by reducing the $1.5 million principal amount to approximately $1.0
million. The decrease was the result of agreed upon purchase price adjustments. The principal on this note was originally agreed to be paid over the course of the third and fourth quarters of 2008 and the first quarter of 2009, but was paid in full
during the first quarter of 2008 in conjunction with the execution of the JPM Credit Agreement.

The following is a summary of long-term debt and the related balances as of March 31, 2010 and December 31, 2009 (in thousands):

Description of Debt

March 31, 2010

December 31,2009

Revolving credit loan under the JPM Credit Agreement bearing interest at LIBOR plus the applicable margin, as defined (1.77% as
of March 31, 2010) and at the Alternative Base Rate plus the applicable margin, as defined (3.75% as of March 31, 2010), maturing on January 2, 2013

$

43,200

$

42,000

Term loan under the JPM Credit Agreement bearing interest at LIBOR plus the applicable margin, as defined (1.81% as of
March 31, 2010), maturing on January 2, 2013

18,500

20,000

Research and development loans from the Austrian government bearing interest at approximately 2.50%, maturing on various dates
through December 31, 2013

During the first quarter of 2009, the Company recorded a charge of $0.7 million related to severance costs and restructuring of the organization. This
charge resulted from efforts to align the Companys cost structure with its revenues in light of the severe economic downturn that began in the second half of 2008.

During the third quarter of 2008, the Company amended a sublease agreement for certain facilities located in Alpharetta, Georgia, in order to reduce
future operating costs. In accordance with FASB ASC Topic 420, Exit or Disposal Cost Obligations (ASC 420), the Company recorded a lease restructuring charge based on the fair value of the remaining lease payments at the amendment
date less the estimated sublease rentals that could reasonably be obtained from the property. The restructuring charges were not attributable to any of the Companys reportable segments.

This amendment resulted in a restructuring charge of approximately $0.9 million in the third quarter of 2008, which consisted of $0.3 million for
construction allowance and $0.6 million of lease restructuring reserves associated with the amendment to the sublease. As of March 31, 2010, approximately $0.4 million related to the lease commitments remained in the restructuring reserve to be
paid. The Company anticipates the remaining payments will be made by the first quarter of 2013 (lease expiration). The table below summarizes the activity in the restructuring reserve (in thousands):

During the third quarter of 2005, the Company decided to consolidate certain facilities located in Alpharetta, Georgia, in order to reduce future
operating costs. This resulted in the abandonment of one facility, which formerly housed the Companys customer support call center. The restructuring charges were not attributable to any of the Companys reportable segments. In accordance
with ASC 420, the Company recorded a lease restructuring charge based on the fair value of the remaining lease payments at the abandonment date less the estimated sublease rentals that could reasonably be obtained from the property.

This consolidation resulted in a restructuring charge of approximately $1.5 million in the third quarter of 2005, which consisted of $1.2 million for
facility consolidations and $0.3 million of fixed asset write-offs associated with the facility consolidation. As of March 31, 2010, approximately $0.1 million related to the lease commitments remained in the restructuring reserve to be paid.
The Company anticipates the remaining payments will be made by the fourth quarter of 2010 (lease expiration). The table below summarizes the activity in the restructuring reserve (in thousands):

We currently operate in three segments: (1) Hospitality-Americas, (2) Retail & Entertainment-Americas and (3) International. The
Hospitality-Americas segment represents our North and South American restaurants business, which includes fast food, delivery, quick service and table service restaurant operators. Our Retail & Entertainment-Americas segment is comprised of
our other North and South American business lines which serve petroleum and convenience retailers, specialty retailers and entertainment venues, including movie theaters, stadiums and arenas. The International segment focuses on our foreign
operations outside of the Companys other two segments and primarily focuses on restaurant businesses and petroleum and convenience retail businesses. These segments became effective January 1, 2010 and replace the former reportable
segments of Hospitality and Retail. All information reported for fiscal year 2009 has been reclassified to present data in accordance with the new segments.

The reportable segments were identified based on the manner in which management reviews operating results and makes decisions regarding the allocation of
the Companys resources. Each segment focuses on delivering site management systems, including point-of-sale, self-service kiosk, and back-office systems, designed specifically for each of the core vertical markets. The Companys segments
derive revenues from the sale of (i) products, including system software and hardware, and (ii) services, including client support, maintenance, training, custom software development, hosting, electronic payment processing and
implementation services.

The accounting policies of the segments are substantially the same as those described in the summary of significant
accounting policies included in the Companys Form 10-K for the year ended December 31, 2009, as filed with the Securities and Exchange Commission. Management evaluates the financial performance of the segments based on direct operating
income, which is profit or loss before the allocation of certain corporate costs.

The following table presents revenue for the Companys
reportable segments as well as a reconciliation of segment direct operating income to the Companys consolidated income before taxes (in thousands):

For the three months ended March 31,

2010

2009

Revenues:

Hospitality-Americas

$

48,448

$

40,042

Retail & Entertainment-Americas

20,701

18,161

International

9,753

8,762

Corporate

645

638

Total revenues

$

79,547

$

67,603

Direct operating income:

Hospitality-Americas

$

11,060

$

9,240

Retail & Entertainment-Americas

5,640

4,882

International

1,008

928

Corporate

25

68

Total segment direct operating income

17,733

15,118

Indirect corporate operating costs (a)

(8,371

)

(7,320

)

Indirect depreciation and amortization expense (b)

(3,224

)

(2,982

)

Stock-based compensation expense (c)

(1,107

)

(1,510

)

Interest and other, net (d)

(341

)

(1,794

)

Total income before taxes

$

4,690

$

1,512

(a)

Represents unallocated corporate expenses including central marketing, product development and general and administrative costs.

(b)

Depreciation expense and amortization of intangible assets for each reportable segment is included in a separate schedule within this note.

(c)

See Note 2 for additional discussion of stock-based compensation expense.

(d)

This amount for the three-month period ended March 31, 2009 includes a write-off charge of approximately $0.5 million for certain third-party software licenses
that were deemed unusable, a charge of approximately $0.7 million related to severance costs and restructuring of the organization, and a net gain of approximately $0.1 million on the sale of a building. None of these items were specifically
attributable to any of our reportable segments.

The Company adopted guidance issued by the FASB related to accounting for uncertainty in income taxes on January 1, 2007. This guidance, included in
ASC Topic 740, Income Taxes, prescribes a consistent recognition threshold and measurement attribute, as well as clear criteria for subsequently recognizing, derecognizing and measuring such tax positions, for financial statement purposes.
The guidance also requires expanded disclosure with respect to the uncertainty in income taxes. During the three months ended March 31, 2010, the reserve for uncertainty in income taxes was increased by less than $0.1 million, which resulted in
an increase to income tax expense.

Consistent with the Companys continuing practice, interest and/or penalties related to income tax
matters are recorded as part of income tax expense. The Company has accrued less than $0.1 million of interest and penalties associated with uncertain tax positions for the three months ended March 31, 2010.

The Companys effective tax rates for the quarters ended March 31, 2010 and 2009 were equal to 44.6% and 32.0%, respectively, inclusive of
discrete events. The year-over-year increase is primarily attributable to the tax expected on the amount of subpart F income that would be recognized for the current year assuming IRC Section 954(c)(6), Look-Thru Rule for Related Controlled
Foreign Corporations, is not extended. The look-thru rule generally excludes from U.S. federal income tax certain dividends, interest, rents, and royalties received or accrued by one controlled foreign corporation (CFC) of a U.S.
multinational enterprise from a related CFC that would otherwise be taxable pursuant to the subpart F regime. The tax provision permitting the look-thru rule lapsed on December 31, 2009. A proposal to extend the look-thru rule retroactively to
January 1, 2010, has been included in proposed legislation but has not been enacted as of March 31, 2010. If the proposal is enacted later in 2010, the annual effective tax rate will be adjusted discretely in the interim period that
includes the enactment date. A discrete adjustment will have a significant impact on reducing the effective tax rate.

Managements
Discussion and Analysis (MD&A) is intended to facilitate an understanding of Radiants business and results of operations. This MD&A should be read in conjunction with the MD&A included in our Annual Report on Form 10-K
for the year ended December 31, 2009, as well as the condensed consolidated financial statements and the accompanying notes to condensed consolidated financial statements included elsewhere in this report. MD&A consists of the following
sections:



Overview: A summary of Radiants business and opportunities



Results of Operations: A discussion of operating results



Liquidity and Capital Resources: An analysis of cash flows, sources and uses of cash, contractual obligations and financial position



Critical Accounting Policies and Procedures: A discussion of critical accounting policies that require the exercise of judgments and estimates



Recent Accounting Pronouncements: A summary of recent accounting pronouncements and the effects on the Company

We are a leading
international provider of technology focused on the development, installation and delivery of solutions for managing site operations of hospitality and retail businesses including restaurants, convenience stores, stadiums, arenas, movie theatres and
specialty retailers. Our point-of-sale and back-office technology is designed to enable businesses to deliver exceptional customer service while improving profitability. We offer a full range of products and services that are tailored to specific
market needs, including hardware, software, professional services and electronic payment processing. We believe we offer best-of-breed solutions designed for ease of integration in managing site operations, thus enabling operators to improve
customer service while reducing costs. We believe our approach to site operations is unique in that our product solutions provide enterprise visibility and control at the site, field, and headquarters levels.

Our growth continues to be driven by the long-term industry shift toward a full system solution provider, the ability to have vertical solutions and
non-payment applications residing at the point-of-sale, and new technology that enables operators to enhance their revenue drivers, such as speed and consistency of service, customer loyalty programs, order accuracy, loss prevention and providing
customers with greater value and a broader selection of products. Most recently, there have been well publicized breaches of point-of-sale and back-office systems that handle consumer card details, spurring widespread interest in more secure payment
terminals and end-to-end encryption technology. We believe we are well positioned to meet the needs of our industry segments and the concerns around security with our suite of product offerings, which consist of hardware and software for
point-of-sale and operational applications, as well as our back-office application offerings, which include inventory, labor, financial management, fraud management and other centrally hosted enterprise solutions.

Security has become a driving factor in our industry as our customers try to meet ever escalating governmental requirements directed toward the
prevention of identity theft, as well as operating safeguards imposed by the credit and debit card associations. In September 2006, these card associations established the PCI Security Standards Council to oversee and unify industry standards in the
areas of credit card data security. We believe we are a leader in providing systems and software solutions that meet the payment application requirements, and we will continue to help the industry define new standards across the payment process,
educate businesses on how to reduce theft by meeting the Payment Card Industry Data Security Standard (PCI DSS) requirement process, and build new technologies outside our point-of-sale software to combat theft.

We currently operate in three segments: (1) Hospitality-Americas, (2) Retail & Entertainment-Americas and (3) International. The
Hospitality-Americas segment represents our North and South American restaurants business, which includes fast food, delivery, quick service and table service restaurant operators. Our Retail & Entertainment-Americas segment is comprised of
our other North and South American business lines which serve petroleum and convenience retailers, specialty retailers and entertainment venues, including movie theaters, stadiums and arenas. The International segment focuses on our foreign
operations outside of the Companys other two segments and primarily focuses on restaurant businesses and petroleum and convenience retail businesses. These segments became effective January 1, 2010 and replace the former reportable
segments of Hospitality and Retail. All information reported for fiscal year 2009 has been reclassified to present data in accordance with the new segments.

Each segment focuses on delivering site management systems, including point-of-sale, self-service kiosk, and back-office systems, designed specifically
for each of the core vertical markets. We believe our customers benefit from a number of competitive advantages gained through our 25-year history of success in our industry segments. These advantages include our globally trusted brand names, large
installed base, customizable platforms and our investment in research and development of new products for our industry segments.

The
point-of-sale markets in which we operate are intensely competitive and highly dynamic, categorized by advances in technology, product introductions and the ability to respond to security standards. This competitive environment and the expectation
in the marketplace that technology will continue to improve while becoming less expensive results in significant pricing pressures. Our ability to compete generally depends on how well we navigate within this environment. To compete successfully we
must continue to commercialize our technology, develop new products that meet constantly evolving customer requirements, continually improve our existing products, processes and services faster than our competitors, and price our products
competitively while reducing average unit costs.

Our financial results for the first quarter of 2010 reflect significant improvement over the
same period a year ago, primarily due to stronger global economic and industry conditions. In the first half of 2009, negative trends in consumer spending and pervasive economic uncertainty led to slowed new site openings and reduced capital
spending from existing customers. However, in the second half of 2009, demand began to increase and was recognized through new customer contracts, a growing pipeline of opportunities and the stabilization of our channel partners. We expect this
trend to continue throughout 2010 due to the number of significant new contracts signed in recent months, the visibility of the sales pipeline available to us, our ability to work closely with our channel partners to help end customers realize the
benefits of new technology in their sites, and the launching of several new products in hosted solutions, mobile ordering and a new point-of-sale terminal in Europe.

Three Months Ended March 31, 2010 Compared to the Three Months Ended March 31, 2009 and December 31, 2009

Systems  Systems revenues are derived from sales and licensing fees for our point-of-sale hardware and software, site management
software solutions and peripherals. System sales during the first quarter of 2010 were approximately $34.3 million. This is an increase of $7.3 million, or 27%, over the same period in 2009, and an increase of $0.3 million, or 1%, over the fourth
quarter of 2009. We typically experience a decline in systems revenue from the fourth quarter to the first quarter in any given year due to the cyclical nature of capital expenditures throughout the retail market. However, due to strong system sales
within the direct business in our Hospitality-Americas segment, we saw a slight increase in systems revenue from the fourth quarter of 2009. The increase experienced over the first quarter of 2009 can primarily be attributed to the improvements
being seen in the global economy, which in turn has increased new site openings and capital spending from new and existing customers across almost all areas of our business. The increase is also explained by some significant contracts being signed
within recent months.

Maintenance, subscription and transaction services  The Company derives revenues from
maintenance, subscription and transaction services, including hardware maintenance, software support and maintenance, hosted solutions and electronic payment processing services. The majority of these revenues are derived from support and
maintenance, which is structured on a renewable basis and is directly attributable to the base of installed sites. A majority of all subscription, maintenance and support contracts are renewed annually. Revenues from maintenance, subscription and
transaction services during the first quarter of 2010 were approximately $35.9 million. This is an increase of $4.7 million, or 15%, over the same period in 2009, and an increase of $0.4 million, or 1%, over the fourth quarter of 2009. The increases
over the first quarter of 2009 and the fourth quarter of 2009 are primarily due to increased demand for our hosted solutions, the additional revenues generated in both hardware and software support and maintenance resulting from increased systems
sales (which added to our site base for recurring revenue), and increased revenues within our electronic payment processing business. Due to the significant systems revenues generated towards the end of the first quarter of 2010 and the cyclical
nature of our electronic payment processing business, we expect the growth of these services to be greater than the growth from the fourth quarter of 2009 to the first quarter of 2010.

Professional services  The Company also derives revenues from professional services such as consulting, training, custom software
development and system installations. Revenues from professional services during the first quarter of 2010 were approximately $9.3 million. This is a decrease of $0.1 million, or 1%, as compared to the same period in 2009, and an increase of $1.0
million, or 12%, over the fourth quarter of 2009. From the first quarter of 2009 through the first quarter of 2010, we have begun to see a shift in customer spending from consulting and custom development projects to capital purchases of systems.
This shift has resulted in a decrease in our one-time consulting and custom development revenues but has been replaced with installation revenue related to the new system sales. The increase from the fourth quarter of 2009 is also primarily due to
the new system sales previously discussed and the installation revenues that were generated from these sales.

Systems gross profit
 Cost of systems consists primarily of hardware and peripherals for site-based systems and amortization of capitalized labor costs for internally developed software. All costs, other than capitalized software development costs, are
expensed as products are shipped, while capitalized software development costs are amortized on a straight-line basis over the estimated useful life of the software. Systems gross profit increased by $1.5 million, or 12%, in the first quarter of
2010 as compared to the same period in 2009, and decreased by $1.1 million, or 7%, as compared to the fourth quarter of 2009. The gross profit percentage decreased by six percentage points to 42% in the first quarter of 2010 as compared to the same
period in 2009, and decreased from the fourth quarter of 2009 by four percentage points. The decreases in the gross profit percentage are primarily due to fluctuations in product mix as hardware, which has lower margins than software, accounted for
a larger portion of systems sales in the first quarter of 2010. We expect margins to improve throughout 2010.

Maintenance, subscription
and transaction services gross profit  Cost of maintenance, subscription and transaction services consists primarily of personnel and other costs to provide support and maintenance services, hosted solutions and electronic payment
processing services. The gross profit on maintenance, subscription and transaction services increased by approximately $2.6 million, or 17%, as compared to the same period in 2009, and increased by $0.5 million, or 3%, as compared to the fourth
quarter of 2009. The gross profit percentage remained relatively consistent, increasing by one percentage point to 51% in the first quarter of 2010 as compared to the same period in 2009 and the fourth quarter of 2009.

Professional services gross profit  Cost of professional services consists primarily of personnel costs for consulting, training,
custom software development and installation services. The gross profit on professional services for the first quarter of 2010 decreased by approximately $0.7 million, or 23%, as compared to the same period in 2010, and decreased by $0.1 million, or
4%, as compared to the fourth quarter of 2009. The gross profit percentage decreased by eight percentage points to 26% in the first quarter of 2010 as compared to the same period in 2009, and decreased by four percentage points as compared to the
fourth quarter of 2009. The decreases in the gross profit percentage are the result of a change in mix where more revenues came from lower margin services, such as installations, than from higher margin services, such as consulting and custom
development services.

Segment revenues  In the first quarter of 2010, total revenues in the Hospitality-Americas business
segment were approximately $48.4 million. This is an increase of $8.4 million, or 21%, as compared to the same period in 2009 and an increase of $4.4 million, or 10%, as compared to the fourth quarter of 2009. The increase over the first quarter of
2009 is primarily the result of improved economic conditions, which resulted in increased demand across all product lines in both our direct and channel businesses. The increase is also due to some significant contracts being signed within recent
months. The increase over the fourth quarter of 2009 was primarily attributable to an increase in systems sales in our direct business.

In
the first quarter of 2010, total revenues in the Retail & Entertainment-Americas business segment were approximately $20.7 million. This is an increase of $2.5 million, or 14%, as compared to the same period in 2009 and a decrease of $1.4
million, or 6%, as compared to the fourth quarter of 2009. The increase over the first quarter of 2009 is primarily attributable to strength in systems sales along with increases in related support and maintenance revenues across each business
within the segment, largely due to improved economic and industry conditions. This increase was partially offset by a decrease in one-time consulting services within our convenience retail business, which did not repeat in the first quarter of 2010.
The decrease from the fourth quarter of 2009 is mainly attributable to decreased systems sales, which was expected given the seasonal nature of capital expenditures throughout the retail market.

In the first quarter of 2010, total revenues in the International business segment were approximately $9.8 million. This is an increase of $1.0 million,
or 11%, as compared to the same period in 2009 and a decrease of $0.7 million, or 7%, as compared to the fourth quarter of 2009. The increase over the first quarter of 2009 is the result of increased systems sales, including handhelds in the
European market, and hardware and software maintenance and support within our convenience retail business. The decrease from the fourth quarter was primarily due to a decline in systems sales within our convenience retail business, which was
expected given the seasonal nature of capital expenditures throughout the retail market. This decrease was partially offset by an increase in handheld sales in the European market.

Segment direct operating income  The Company evaluates the financial performance of the segments based on direct operating income,
which is profit or loss before the allocation of certain corporate costs.

In the first quarter of 2010, direct operating income in the
Hospitality-Americas business segment was approximately $11.1 million. This is an increase of $1.8 million, or 20%, as compared to the same period in 2009 and an increase of $1.1 million, or 11%, as compared to the fourth quarter of 2009. The
increase over the first quarter of 2009 is primarily attributable to increased hosted solutions profits and increased systems sales profits in our direct and channel businesses. These increases were partially offset by an increase in operating
expenses, primarily sales commissions, which increased as expected in line with the overall increase in revenues. The increase over the fourth quarter of 2009 is primarily due to additional profits resulting from increased systems sales within our
direct business.

In the first quarter of 2010, direct operating income in the Retail & Entertainment-Americas
business segment was approximately $5.6 million. This is an increase of $0.8 million, or 16%, as compared to the same period in 2009 and a decrease of $0.3 million, or 6%, as compared to the fourth quarter of 2009. The increase over the first
quarter of 2009 is the result of additional profits resulting from increased systems sales and related support and maintenance revenues, as previously discussed. This increase was partially offset by reduced consulting service profits within our
convenience retail business. The decrease in direct operating income from the fourth quarter of 2009 was primarily due to decreased profits from systems sales within our convenience retail business, as expected due to the seasonal decline in
revenues.

In the first quarter of 2010, direct operating income in the International business segment was approximately $1.0 million. This is
an increase of $0.1 million, or 9%, as compared to the same period in 2009 and an increase of $0.5 million, or 120%, as compared to the fourth quarter of 2009. The increase over the first quarter of 2009 is due to additional profits resulting from
increased handheld sales in Europe and increased support and maintenance revenues related to our convenience retail business in the Asia Pacific region. The increase in direct operating income over the fourth quarter of 2009 was primarily the result
of a decrease in general and administrative operating expenses.

Total operating expenses  The Companys total
operating expenses increased by approximately $0.5 million, or 2%, during the first quarter of 2010 as compared to the same period in 2009 and decreased by approximately $19.7 million, or 39%, as compared to the fourth quarter of 2009. Total
operating expenses as a percentage of total revenues were 38% in the first quarter of 2010 compared to 44% in the first quarter of 2009 and 64% in the fourth quarter of 2009. The significant decrease from the fourth quarter is explained by
impairment charges related to goodwill and certain intangible assets that were not repeated in the first quarter of 2010. The components of operating expenses are discussed below:



Product development expenses  Product development expenses consist primarily of wages and materials expended on product development
efforts, excluding any development expenses related to associated revenues, which are included in costs of maintenance, subscription and transaction services. Product development expenses increased during the first quarter of 2010 by approximately
$0.6 million, or 11%, as compared to the same period in 2009 and were flat as compared to the fourth quarter of 2009. The increase from the first quarter is due to normal fluctuations among maintenance, custom development, capitalized software
projects and product development. Product development expenses as a percentage of revenues were 7% for the first quarter of 2010 as compared to 8% for the same period in 2009 and 7% for the fourth quarter of 2009.



Sales and marketing expenses  Sales and marketing expenses increased during the first quarter of 2010 by approximately $1.1
million, or 10%, as compared to the same period in 2009 and increased by $0.7 million, or 6%, as compared to the fourth quarter of 2009. The increase over both periods is primarily due to incremental sales commissions expense directly related to the
increase in revenues and an increased focus on marketing activities. Sales and marketing expenses as a percentage of revenues were 15% in the first quarter of 2010 as compared to 16% for the same period in 2009 and 14% in the fourth quarter of 2009.



Depreciation and amortization expenses  Depreciation and amortization expenses increased during the first quarter of 2010 by
approximately $0.2 million, or 6%, as compared to the same period of 2009 and increased by $0.2 million, or 7%, as compared to the fourth quarter of 2009. The slight increases are due to additional depreciation expense resulting from routine capital
spending to support our business operations and the start of the utilization of our newly upgraded ERP system, which was partially offset by a decline in amortization expense for assets that became fully amortized during the period. Depreciation and
amortization expenses as a percentage of revenues were 5% for the first quarters of 2010 and 2009 and the fourth quarter of 2009.



General and administrative expenses  General and administrative expenses decreased during the first quarter of 2010 by
approximately $0.1 million, or 1%, as compared to the same period in 2009 and increased by $0.3 million, or 3%, as compared to the fourth quarter of 2009. The decrease from the first quarter of 2009 is primarily due to slightly lower expense related
to stock-based compensation. The increase from the fourth quarter of 2009 is primarily the result of additional bonus expense related to the Companys performance as compared to its operating budget. General and administrative expenses as a
percentage of revenues were 12% in the first quarter of 2010 as compared to 14% for the same period in 2009 and 11% in the fourth quarter of 2009.



Other income and charges, net  The amounts contained under this heading are unlikely to occur again in the normal course of
business and, as such, it is not practical to compare amounts between the current period and previous periods. However, a description of the items which comprise these amounts follows:



There were no items within this category during the first quarter of 2010.



During the first quarter of 2009, we determined that we would not use certain third-party software licenses and recorded a write-off charge of $0.5
million as a result. Also during the first quarter of 2009, we recorded a charge of $0.7 million related to severance costs and restructuring of the organization. This charge resulted from efforts to align our cost structure with our revenues in
light of the severe economic downturn that began in the second half of 2008. These charges were partially offset by a gain of $0.1 million on the sale of a building, which occurred in the first quarter of 2009.

Interest expense, net  The Companys interest expense includes interest expense incurred on its long-term debt, revolving line of
credit and capital lease obligations. In the first quarter of 2010, interest expense decreased by approximately $0.3 million, or 43%, as compared to the same period in 2009 and decreased by $0.1 million, or 27%, as compared to the fourth quarter of
2009. These decreases are due to the continued paydown of the Companys outstanding indebtedness and a reduction in interest rates. See Note 7 to the condensed consolidated financial statements for additional discussion of the Companys
credit facility.

Income tax provision  The Companys effective tax rates for the quarters ended March 31, 2010
and 2009 were equal to 44.6% and 32.0%, respectively, inclusive of discrete events. The year-over-year increase is primarily attributable to the tax expected on the amount of subpart F income that would be recognized for the current year assuming
IRC Section 954(c)(6), Look-Thru Rule for Related Controlled Foreign Corporations, is not extended. The look-thru rule generally excludes from U.S. federal income tax certain dividends, interest, rents, and royalties received or accrued
by one controlled foreign corporation (CFC) of a U.S. multinational enterprise from a related CFC that would otherwise be taxable pursuant to the subpart F regime. The tax provision permitting the look-thru rule lapsed on
December 31, 2009. A proposal to extend the look-thru rule retroactively to January 1, 2010, has been included in proposed legislation but has not been enacted as of March 31, 2010. If the proposal is enacted later in 2010, the annual
effective tax rate will be adjusted discretely in the interim period that includes the enactment date. A discrete adjustment will have a significant impact on reducing the effective tax rate.

Prior to January 2008, the Company had a senior secured credit facility with Wells Fargo Foothill, Inc. (the WFF Credit Agreement). The WFF
Credit Agreement provided for extensions of credit, upon satisfaction of certain conditions, in the form of revolving loans in an aggregate principal amount of up to $15 million and a term loan facility in an aggregate principal amount of up to $31
million. The revolving loan amount available to the Company was derived from a monthly borrowing base calculation using the Companys various accounts receivable balances. The amount derived from this borrowing base calculation was further
reduced by the total amount of letters of credit outstanding. Loans under the WFF Credit Agreement bore interest, at the Companys option, at either the London Interbank Offering Rate (LIBOR) plus two and one half percent or the
prime rate of Wells Fargo Bank, N.A.

The WFF Credit Agreement was scheduled to expire on March 31, 2010. However, it was refinanced on
January 2, 2008 upon the execution of the credit agreement with JPMorgan Chase Bank, N.A., as arranger, and JPMorgan Chase Bank, N.A., SunTrust Bank, Bank of America, BBVA Compass Bank and Wachovia Bank, N.A., as lenders (the JPM Credit
Agreement). The JPM Credit Agreement and subsequent amendments thereto provide for extensions of credit, upon satisfaction of certain conditions, in the form of revolving loans in an aggregate principal amount of up to $80 million and a term
loan facility in an aggregate principal amount of up to $30 million. An amendment to the JPM Credit Agreement was signed in July 2008, whereby the Company has the right to increase its revolving credit commitment by up to $25 million, subject to the
terms and conditions set forth in the JPM Credit Agreement. As of March 31, 2010, aggregate borrowings under this facility totaled $61.7 million, comprised of $43.2 million in revolving loans and $18.5 million in term loan facility borrowings.
As of March 31, 2010, revolving loan borrowings available to the Company were equal to $36.8 million.

The JPM Credit Agreement is
guaranteed by the Company and its subsidiaries and is secured by the assets of the Company and its subsidiaries. The maturity date of the JPM Credit Agreement is January 2, 2013. Interest accrues on amounts outstanding under the loan facility,
at the Companys option of either (1) LIBOR plus a margin ranging between 1.25% and 2.00% based upon the Companys consolidated leverage ratio, as defined, or (2) the higher of the administrative agents prime rate or
one-half of one percent over the federal funds effective rate plus a margin ranging between 0.25% and 1.00% based on the Companys consolidated leverage ratio, as defined. The leverage ratio covenant limits the Companys consolidated
indebtedness to a multiple of three times its consolidated earnings before interest, taxes, depreciation and amortization (EBITDA) as determined on a pro forma basis over the prior four quarters. The fixed charge coverage ratio requires
the Company to maintain the ratio of its consolidated EBITDA as determined on a pro forma basis less capital expenses to its fixed charges (which includes regularly scheduled principal payments, consolidated interest expense, taxes paid or payable
in accordance with GAAP, and restricted payments) to at least 1.2 to 1 for periods ending in 2008, 1.3 to 1 for periods ending in 2009, and 1.35 to 1 thereafter. The JPM Credit Agreement contains certain customary representations and warranties from
the Company. In addition, the JPM Credit Agreement contains certain financial and non-financial covenants, with which the Company was in compliance as of March 31, 2010. Further explanation of this agreement is presented in Note 7 to the
condensed consolidated financial statements.

The Companys working capital increased by approximately $6.9 million, or 24%, to $35.7
million at March 31, 2010 as compared to $28.8 million at December 31, 2009. The changes in working capital during the quarter resulted from an increase in the Companys current assets, equal to approximately $11.1 million, offset by
an increase in current liabilities of approximately $4.1 million, as more fully explained below. The Company has historically funded its business through cash generated by operations.

Cash used in operating activities during the three months ended March 31, 2010 was approximately $0.6 million. Cash from operations was mainly
generated through income from operations, adjusted to exclude the effect of non-cash charges, including depreciation, amortization, stock-based compensation expense and other charges. Changes in assets and liabilities decreased operating cash flows
during the first three months of 2010, principally due to an increase in accounts receivable attributable to increased sales, the majority of which was sold in the latter part of the quarter, and the timing of certain cash collections. This was
partially offset by an increase in client deposits and unearned revenue which was a result of collecting calendar year support and maintenance billings, which have been deferred and are being recognized as revenue over the course of 2010. The
fluctuations in accounts payable and accrued expenses were the result of normal quarterly fluctuations and the timing of payments completed during the quarter. If near-term demand for the Companys products weakens, or if significant
anticipated sales in any quarter do not close when expected, the availability of funds from operations may be adversely affected.

Cash
provided by operating activities during the three months ended March 31, 2009 was approximately $11.6 million. Cash from operations was mainly generated through income from operations, adjusted to exclude the effect of non-cash charges,
including depreciation, amortization, stock-based compensation expense and other charges. Changes in assets and liabilities increased operating cash flows during the first quarter of 2009, principally due to a reduction in accounts receivable and an
increase in client deposits and unearned revenue. The decrease in the Companys accounts receivable balance during the first quarter of 2009 was largely the result of the year over year revenue decrease, while the increase in client deposits
and unearned revenue was attributable to significant amounts of cash received for calendar year support and maintenance, which had been deferred and was recognized as revenue over the course of 2009. These increases in operating cash flows were
offset by decreases in accounts payable and accrued expenses, due to normal quarterly fluctuations and annual bonuses and commissions being paid during the first quarter of 2009.

Cash used in investing activities during the three months ended March 31, 2010 was approximately $2.3 million. Approximately $1.3 million was used
to invest in property and equipment during the first three months of 2010. The Company also continued to increase its investment in future products by investing $1.0 million in internally developed capitalizable software during the first quarter of
2010.

Cash used in investing activities during the three months ended March 31, 2009 was approximately $4.3 million. Approximately $1.3
million was used to invest in property and equipment and $2.0 million related to the purchase of a customer list. The Company continued to increase its investment in future products by investing $1.1 million in internally developed capitalizable
software during the first quarter of 2009. Lastly, the Company recognized cash proceeds of $0.2 million from the sale of a building located in Australia.

Cash provided by financing activities during the three months ended March 31, 2010 was approximately $2.1 million. Financing activities included
proceeds from and repayments against the Companys revolving loan facility under the JPM Credit Agreement during the first quarter of 2010. In addition, the Company completed scheduled principal payments against the term loan under the JPM
Credit Agreement and scheduled payments against the Companys capital lease obligations. The Company also received cash proceeds from the exercise of stock options by employees and recognized excess tax benefits from stock-based compensation
expense resulting from exercised options during the first quarter of 2010.

Cash used in financing activities during the three months ended
March 31, 2009 was approximately $10.8 million. Financing activities included proceeds from and repayments against the Companys revolving loan facility under the JPM Credit Agreement during the first quarter of 2009. In addition, the
Company completed scheduled principal payments against the term loan under the JPM Credit Agreement and scheduled payments against the Companys capital lease obligations. The Company also recognized excess tax benefits from stock-based
compensation resulting from options granted during the first quarter of 2009.

The Company believes that its cash and cash equivalents, funds generated from operations and borrowing
capacity will provide adequate liquidity to meet its normal operating requirements, as well as to fund the above obligations, for at least the next twelve months.

The Company believes there are opportunities to grow its business through the acquisition of complementary and synergistic companies, products and
technologies. We look for acquisitions that can be readily integrated and accretive to earnings, although we may pursue smaller non-accretive acquisitions that will shorten our time to market with new technologies. The Company expects the general
size of cash acquisitions that it would currently consider would be in the $5 million to $50 million range. Any material acquisition could result in a decrease in the Companys working capital, depending on the amount, timing and nature of the
consideration to be paid. In addition, any material acquisitions of complementary or synergistic companies, products or technologies could require that we obtain additional debt or equity financing. There can be no assurance that such additional
financing will be available to us or that, if available, such financing will be obtained on favorable terms and would not result in additional dilution to our stockholders.

The Company leases office space, equipment and certain vehicles under non-cancelable operating lease agreements expiring on various dates through 2017.
Additionally, the Company leases computer equipment under capital lease agreements which expire on various dates through July 2013. Contractual obligations as of March 31, 2010 are as follows (in thousands):

Payments Due by Period

Total

Less than 1Year

1 - 3
Years

3 - 5
Years

More than 5Years

Capital leases

$

1,288

$

841

$

441

$

6

$



Operating leases (1)

23,313

5,327

9,022

4,871

4,093

Other obligations:

Revolving credit facility (JPM Credit Agreement)

43,200



43,200





Term loan facility (JPM Credit Agreement)

18,500

6,000

12,500





Austrian research & development loan

588



588





Estimated interest payments on credit facility and term notes (2)

5,953

2,409

3,544





Purchase commitments (3)

12,374

11,848

526





Total contractual obligations

$

105,216

$

26,425

$

69,821

$

4,877

$

4,093

(1)

This schedule includes the future minimum lease payments related to facilities that are being subleased. The total minimum rentals to be received in the future under
subleases as of March 31, 2010 are approximately $1.8 million in less than one year and $2.8 million in one to three years.

(2)

For purposes of this disclosure, we used the interest rates in effect as of March 31, 2010 to estimate future interest expense. See Note 7 to the condensed
consolidated financial statements for further discussion of our debt components and their interest rate terms.

(3)

The Company has entered into certain noncancelable and custom purchase orders for manufacturing supplies to be used in its normal operations. The related supplies are
to be delivered at various dates through September 2011.

At March 31, 2010, the Company had a $2.8 million reserve for
unrecognized tax benefits, which is not reflected in the table above. Substantially all of this tax reserve is classified in other long-term liabilities and deferred income taxes on the accompanying condensed consolidated balance sheet.

The Companys discussion
and analysis of its financial condition and results of operations are based upon its consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States. The preparation of
these financial statements requires management to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities. On an ongoing basis,
management evaluates these estimates, including those related to client programs and incentives, product returns, bad debts, inventories, intangible assets, income taxes, and commitments and contingencies. Management bases its estimates on
historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily
apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.

There have been no
material changes to our critical accounting policies and estimates from the information provided in Item 7, Managements Discussion and Analysis of Financial Condition and Results of Operations, included in the Companys
Annual Report on Form 10-K for the year ended December 31, 2009.

In
October 2009, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2009-14 (ASU 2009-14), Software (Topic 985): Certain Revenue Arrangements That Include Software
Elementsa consensus of the FASB Emerging Issues Task Force. This ASU establishes that tangible products that contain software that works together with the nonsoftware components of the tangible product to deliver the tangible
products essential functionality are no longer within the scope of software revenue guidance. These items should be accounted for under other appropriate revenue recognition guidance. We are required to adopt this ASU prospectively for new or
materially modified agreements as of January 1, 2011 and concurrently with ASU 2009-13 which is described below. Full retrospective application is optional and early adoption is permitted at the beginning of a fiscal year. We are currently
evaluating the impact of this ASU on our financial statements.

In October 2009, the FASB issued Accounting Standards Update No. 2009-13
(ASU 2009-13), Revenue Recognition (Topic 605): Multiple-Deliverable Revenue Arrangementsa consensus of the FASB Emerging Issues Task Force. This ASU amends the criteria for separating consideration in multiple-deliverable
arrangements, which will, as a result, separate multiple-deliverable arrangements more often than under existing U.S. GAAP. Additionally, this ASU establishes a selling price hierarchy for determining the selling price of a deliverable. The ASU also
eliminates the residual method of revenue allocation and requires that arrangement consideration be allocated at the inception of the arrangement to all deliverables using the relative selling price method. This guidance requires that management
determine its best estimate of selling price in a manner consistent with that used to determine the price to sell the deliverable on a stand-alone basis. This ASU significantly expands the disclosures required for multiple-deliverable revenue
arrangements with the objective of disclosing judgments related to these arrangements and the effect that the use of the relative selling-price method and changes in those judgments have on the timing and amount of revenue recognition. We are
required to adopt this ASU prospectively for new or materially modified agreements as of January 1, 2011 and concurrently with ASU 2009-14 which is described above. Full retrospective application is optional and early adoption is permitted at
the beginning of a fiscal year. We are currently evaluating the impact of this ASU on our financial statements.

This Quarterly Report on Form 10-Q of Radiant Systems, Inc. and its subsidiaries contains forward-looking statements. All statements in
this Quarterly Report on Form 10-Q, including those made by the management of Radiant, other than statements of historical fact, are forward-looking statements. Examples of forward-looking statements include statements regarding Radiants
future financial results, operating results, business strategies, projected costs, products, competitive positions, managements plans and objectives for future operations, and industry trends. These forward-looking statements are based on
managements estimates, projections and assumptions as of the date hereof and include the assumptions that underlie such statements. Forward-looking statements may contain words such as may, will, should,
could, would, expect, plan, anticipate, believe, estimate, predict, potential, and continue, the negative of these terms, or
other comparable terminology. Any expectations based on these forward-looking statements are subject to risks and uncertainties and other important factors, including those discussed in the Companys Annual Report on Form 10-K for the year
ended December 31, 2009 filed with the Securities and Exchange Commission (the SEC), including the section titled Risk Factors therein, and in the Companys other periodic filings with the SEC. These and many other
factors could affect Radiants future financial condition and operating results and could cause actual results to differ materially from expectations based on forward-looking statements made in this document or elsewhere by Radiant or on its
behalf. Radiant undertakes no obligation to revise or update any forward-looking statements.

The Companys
financial instruments that are subject to market risks are its long-term debt instruments. During the first quarter of 2010, the weighted average interest rate on its long-term debt was approximately 2.5%. A 10% increase in this rate would have
impacted interest expense by less than $0.1 million for the three-month period ended March 31, 2010.

The Companys revenues derived from sources outside of the United States were approximately $12.2 million and $10.5 million for the three months
ended March 31, 2010 and 2009, respectively. The Companys business outside the United States is subject to risks typical of an international business, including, but not limited to: differing economic conditions, changes in political
climate, differing tax structures, other regulations and restrictions and foreign exchange rate volatility. Accordingly, the Companys future results could be materially adversely impacted by changes in these or other factors.

ITEM 4.

CONTROLS AND PROCEDURES

The
Company has established disclosure controls and procedures to ensure that material information relating to the Company, including its consolidated subsidiaries, is made known to the officers who certify its financial reports and to other members of
senior management and the Companys board of directors.

Based on their evaluation as of March 31, 2010, the principal executive
officer and principal financial officer of the Company have concluded that the Companys disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934) are effective to ensure that the
information required to be disclosed by the Company in the reports that it files or submits under the Securities Exchange Act of 1934 (the Act) is recorded, processed, summarized and reported within the time periods specified in SEC
rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by the Company in the reports that it files or submits under the Act is accumulated
and communicated to the Companys management, including its principal executive and principal financial officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.

In the first quarter of 2010, we completed an upgrade of our ERP system. This project is the result of our normal business process to evaluate and upgrade
our systems software and related business processes to support our evolving operational needs. As part of the upgrade, we have continued to update our internal controls over financial reporting as necessary to accommodate any modifications to our
business processes and accounting procedures. The upgrade was subject to comprehensive testing and review and we believe that appropriate internal controls are in place with the upgraded system. Other than the upgrade of our ERP system, there have
been no changes in the Companys internal control over financial reporting during the most recent fiscal quarter that have materially affected, or are reasonably likely to materially affect, the Companys internal controls over financial
reporting.

The following exhibits
are filed with or incorporated by reference into this report. The exhibits which are denominated by an asterisk (*) were previously filed as a part of, and are hereby incorporated by reference from (i) a Registration Statement on Form S-1
for the Registrant, Registration No. 333-17723, as amended (2/97 S-1), (ii) a Registration Statement on Form S-1 for the Registrant, Registration No. 333-30289 (6/97 S-1), (iii) the Registrants Form
8-K filed December 17, 2007 (the December 17, 2007 8-K), (iv) the Registrants Form 8-K filed January 8, 2008 (the January 8, 2008 8-K), (v) the Registrants Form 8-K filed July 9, 2008 (the
July 9, 2008 8-K), (vi) a Registration Statement on Form S-3 for the Registrant, Registration No. 333-162309 (10/09 S-3) and (vii) the Registrants Form 8-K filed March 31, 2010 (the
March 31, 2010 8-K).